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Public Financing Folly

Chapel Hill’s “voter-owned elections” program had its first run in 2009 and is already being heralded as a success by its supporters. According to them, the municipal elections in Chapel Hill achieved all of the aims that taxpayer financed campaigns are meant to achieve.

The only thing that public financing really achieved in Chapel Hill, however, was victory for the candidates who used it.

There are many lofty benefits promised by supporters of voter-owned elections. First of all, proponents argue that taxpayer-funded campaigns will level the playing field and allow for more candidates who are unable to finance their campaigns to join the races. Last fall’s elections in Chapel Hill, however, suggest otherwise. The only candidates to use public financing were not newcomers to Chapel Hill politics. Mark Kleinschmidt was a member of the town council when he ran for mayor, and Penny Rich had already run for town council two years prior.

Second, supporters argue that publicly financed campaigns will increase voter turnout because voters will feel their vote matters more once the “influence of big moneyed interests” is removed. However, in the 2009 Chapel Hill municipal elections, the first with public campaign financing, voter turnout increased by only 1.28 percentage points over the previous elections, which was not a noticeable increase from the 0.73 point increase in 2007.

The candidates in Chapel Hill who used taxpayer dollars to fund their campaigns sang the praises of the system.

Kleinschmidt claimed in a November Durham Herald-Sun article, “This was one of the most substantive campaigns I’ve ever been a part of, and a lot of that is because participating in the public financing program took the focus off of money and put it on issues.”

Kleinschmidt’s comments are interesting. If the mayoral campaign was substantive, then his opponent, Matt Czajkowski, must have also been engaged in the issues. Kleinschmidt claims that public financing allowed for more substantive discussion, but forgets to mention that Czajkowski chose not to use taxpayer funds. Therefore, Czajkowski managed to keep his mind on the issues without using the taxpayers’ money to finance his campaign.

Town council candidate Penny Rich also lauded the public financing program. “The voter-owned elections program really required me to get out into the community and talk with voters early in the campaign,” Rich said in the Durham Herald-Sun article. “Asking people to invest $5 in my campaign felt good — and really helped strengthen my relationships and my understanding of issues facing Chapel Hill” It sounds as if the act of fundraising helped Rich connect with voters. Indeed, public financing may disconnect voters and politicians.

Advocates of taxpayer-funded elections claim that public financing will encourage more candidates to participate in elections. However, in Chapel Hill’s 2009 election, there were seven town council candidates, the same number of candidates that ran in 2005 and 2007—both years without public financing. Three candidates ran for mayor, compared to two candidates in 2005 and 2007, and this can easily be attributed to the fact that Mayor Kevin Foy was retiring, leaving his seat open. In Chapel Hill, the retirement of an incumbent led to greater candidate participation than publicly funded campaigns.

Another aspect to public financing that doesn’t seem to have been considered in Chapel Hill is the involvement of outside special interest groups. According to the town ordinance that establishes the rules for the publicly financed campaigns, “outside entities,” which can mean individuals, PACS, registered political committees, or any other entity that can make “independent expenditures” (usually media purchases), are required to report their expenditures only if they are making contributions in support of a candidate who is not using public funding.

Conversely, candidates who accept public funds are permitted to unlimited, unreported support from third-party entities. Such one-sided reporting requirements serve to conceal the identity of third-party entities supporting taxpayer-funded candidates, an anonymousness not enjoyed by candidates who do their own fundraising. This measure doesn’t exactly square with the claims that publicly-financed campaigns will level the playing field.

In spite of early proclamations of success, Chapel Hill’s 2009 experiment with so-called voter-owned elections did not accomplish any of the goals established by their supporters. No new candidates opted for the taxpayer financing of their campaigns, the field of candidates did not expand, voter turnout did not increase appreciably, and reporting requirements were applied differently to supporters of candidates who did not accept public funding.

In the end, Chapel Hill taxpayers were left footing the bill for a “welfare for politicians” scheme that directed their hard-earned tax dollars to support the campaigns of candidates they may never have supported voluntarily.